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PERS board warns lack of legislative funding could hurt borrowing costs; treasurer urges infusion to shore up funding
Summary
Board members said the recent legislative session provided no new money for PERS, the state treasurer warned this omission could lower the state's credit rating, and actuaries presented that modest recurring infusions (e.g., $200M over several years) could materially improve funded ratios.
The Public Employees Retirement System of Mississippi's legislative committee spent substantial time Thursday discussing the legislature's decision not to provide additional funding this session and the fiscal consequences for the pension plan and the state's borrowing costs.
State Treasurer (self‑identified) told the committee the system's recent reforms had been viewed positively by credit agencies but that failure to place new funds into PERS could jeopardize that standing. "If we do not put in some money into PERS our credit rating will drop," the treasurer said, adding that he has discussed the issue with market contacts and is concerned smaller funding steps will become more expensive over time.
Board members debated advocacy and messaging options. One board member urged developing a direct communications system to reach the roughly 375,000 people represented by PERS to build political support for funding. Staff agreed to pursue a summer and fall strategy to press for funding ahead of the next session.
Actuarial staff provided illustrative cost and funding scenarios. They said a one‑time $200 million contribution over five years could move funded ratios substantially (one speaker noted that $200 million over five years brought the projection closer to an 80% funded ratio in their sensitivity work), while larger one‑time infusions would yield greater long‑term benefits. Actuary remarks emphasized the compounding effect of earlier funding and the uncertainty tied to investment returns.
Board members acknowledged the PERS board cannot compel legislative action but agreed funding must be the board's priority in outreach and planning. Staff said they will provide additional modeling and communication tools to help the board press for legislative support.
